PARIS Feb 17 PSA Peugeot Citroen's
founding family gave the go-ahead on Monday for a 3 billion euro
($4.1 billion) tie-up with China's Dongfeng that would
draw a line under one of France's oldest industrial dynasties,
The boards of Peugeot family holding Etablissements Peugeot
Freres and its FFP subsidiary signed off on the
capital increase plan to be announced by the French carmaker on
Feb. 19, two people with knowledge of the meetings said.
Directors of the two holding companies approved "all of the
proposals" negotiated with the Chinese carmaker, one source
Peugeot and Dongfeng Motor Group have been in talks for
months over a rescue deal that would see the Chinese automaker
and French government take matching 14 percent stakes. The plan
is due to be approved by Peugeot's own board on Tuesday and
announced the following day, sources have said.
A separate agreement to create a European sales financing
alliance with Banco Santander is due to be unveiled
simultaneously, according to people with knowledge of the plans.
(Reporting by Laurence Frost and Gilles Gillaume)